A proposal of property tax-increase blocker

[Thank you Jeff for suggesting this case.]

In 2005, Minnesota Governor proposed a property tax-increase blocker through "taxpayer satisfaction surveys," according to Star Tribune (Smith, 03/10/2005). Also known as the "turbo-charged, truth-in-taxation" proposal, the bill would allow property owners to challenge the property tax levy decisions of the City Council through a reverse referendum process.

This is how it is supposed to work. Together with their annual property tax statements, property owners will be provided a survey, which would include a question, “Are you satisfied with the proposed property tax levy?” and will provide a space where the taxpayer can answer “yes” or “no”. If at least 20 percent of the surveys are returned with a “no” response, the city would have to hold a referendum on the levy increase. The hearing would be held in January. If the voters do not support the proposed levy, the final levy would be reduced to the previous year’s levy.

Ironically, the Governor initiated this idea while he was significantly reducing local government aid (LGA), which by nature adds pressure for local governments to increase property tax levy so as to keep up with their services. Not surprisingly, "local government officials fought this legislation tooth and nail ," and the bill went nowhere.